PC sales expected to drop as economy sinks

The faltering economy is now projected to claim another victim — the global PC market.

Industry analyst firm IDC says it is projecting that worldwide PC sales will quickly drop off because the sagging economy is causing people to hold onto their savings while credit is unavailable. IDC noted that it expects PC shipments to inch upward by 3.8% in all of 2009, but added that the value of those shipments will drop by 5.3%.

Analysts at IDC, though, are expecting the worldwide market to rebound in the second quarter next year, projecting that PC shipments will increase by 13.7% over the sale period this year.

In the United States, expectations are a bit bleaker. IDC predicts that US shipments are expected to decline by almost 3% in 2009 with low single-digit increases in the next few years.

"Declining shipment growth in the consumer market, along with the relatively stagnant commercial market will lead to fewer opportunities and more intense competition in the US PC market," said Richard Shim, personal computing research manager at IDC, in a written statement.

"Consolidation is expected as PC makers tough out the competitive climate amid lower than expected volumes and thinner margins."

Just a few weeks ago, analyst firm iSuppli slashed its 2009 growth forecast for worldwide PC shipments by nearly two-thirds because of the deteriorating economy. The firm is now projecting that worldwide PC shipments will rise by 4.3% in 2009, down from its previous forecast of 11.9% growth. The firm also adjusted its expectations for 2010, dropping its initial prediction of 9.4% growth to 7.1%.

ISuppli's adjustment to its PC forecast came just one day after the firm downgraded its estimates for global semiconductor revenue for this year. The researcher projected that 2008 semiconductor sales will decline by 2% to US$266.6 billion, from about US$272 billion in 2007. In October, iSuppli predicted that 2008 semiconductor sales would grow by 3.5% over last year's. Analysts also predicted that the negative momentum will continue into the fourth quarter of this year, with the overall market expected to drop by 10.9% compared with the same quarter last year.

Not every market has dropped, though. Early in November, IDC reported that the worldwide microprocessor market hit a new shipment record in the third quarter, largely boosted by Intel's new Atom processor. The chips, designed for the increasingly popular netbook computers, boosted the market despite the turbulent economic times, growing by 8.3% from the second quarter to the third.

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